TN 13 (05-12)

PR 04505.018 Iowa

A. PR 12-101 Garnishment Cases Involving AmeriKids—REPLY

DATE: May 10, 2012

1. SYLLABUS

An opinion was asked on whether the agency may honor Income Withholding for Support Orders/Notices (IWOs) issued by AmeriKids Child Support Specialists, Inc., a non-governmental, private child support collection agency in Sioux Falls, South Dakota. IWOs issued by AmeriKids do not constitute legal process and will not be honored for child support or alimony. However, we must determine whether we should withhold benefits pursuant to an underlying court order served with an IWO issued by the third party, AmeriKids.

2. OPINION

Questions Presented

You asked whether, in general, the agency may honor Income Withholding for Support Orders/Notices (IWOs) issued by AmeriKids Child Support Specialists, Inc., a non-governmental, private child support collection agency in Sioux Falls, South Dakota. If so, you asked whether the agency may withhold the amounts specified in the two IWOs you submitted for our review. You also asked whether the respective divorce decree and other court orders that AmeriKids served with each IWO, standing alone, are for purposes of benefit withholding, and whether a valid withholding order must specifically require payments from the obligor’s Social Security benefits.

Short Answer

The agency may not withhold benefits pursuant to IWOs issued by AmeriKids. Nonetheless, the agency must determine whether an underlying court order served with an AmeriKids IWO, standing alone, is valid for withholding purposes. Here, the agency may not withhold benefits pursuant to the underlying divorce decrees or other court orders at issue because they do not constitute legal process. While legal process need not expressly name the agency as garnishee or specifically require payment from the obligor’s Social Security benefits, legal process must be directed to and for the purpose of compelling a governmental entity that holds moneys, otherwise payable to an individual, to make payments from such moneys in order to satisfy the individual’s legal obligation to provide support. We conclude none of the underlying court orders satisfy this requirement.

Background

AmeriKids issued and served on the Sioux Falls, South Dakota Field Office an IWO for Ronald P~ and an IWO for Ronald H~. Both Ronald P~ and Ronald H~ are Title II beneficiaries who reside in Iowa.

The IWO that AmeriKids issued for Ronald P~, dated September 29, 2010, directs the agency to withhold $750.00 per month from his Social Security benefits. AmeriKids served three underlying court orders with this IWO. A Judgment and Decree of Divorce issued by a South Dakota circuit court in February 1978 ordered Ronald P~ to pay child support of $150 per month per child, plus medical/dental care and insurance, and alimony of $100 per month. In March 1982, the same circuit court entered judgment against Ronald P~ for alimony and child support arrearages totaling approximately $11,000. In December 2001, an Iowa district court entered judgment against Ronald P~ for approximately $43,000 for past due child support and medical expenses, past due alimony, and accrued interest. The court also found Ronald P~ in willful contempt of court for nonpayment of past due child support, sentenced him to 30 days in the county jail, and ordered him to purge his contempt by paying $150 per month to the clerk of the South Dakota circuit court noted above, beginning December 15, 2001.

In April 2011, AmeriKids issued an IWO for Ronald H~ that directs the agency to withhold $300 per month from his benefits. AmeriKids served a Dissolution Decree issued by an Iowa district court in December 1988 with this IWO. 1 The Dissolution Decree has an income withholding provision that directs Ronald H~’s “employer” to deduct $75 per week from his income to satisfy child support arrearages, and upon satisfaction of this amount, to deduct $65 per week from his income to satisfy his current support obligation. The decree states that “the order for mandatory income withholding shall remain in full force and effect for so long as Respondent is obligated to pay child support,” and that it is “binding on current and future employers.”

Discussion

IWOs Issued by AmeriKids Are Not Legal Process, and Thus Do Not Permit Garnishment

As you know, Social Security Title II benefits may be garnished to enforce an individual's legal obligation to provide child support. See 42 U.S.C. §§ 659(a), (h)(1)(A)(ii)(I); 5 C.F.R. § 581.103(c)(1); 20 C.F.R. § 404.1820(b); POMS GN 02410.200(A). The agency must comply with legal process, defined as “any writ, order, summons, notice to withhold income . . . or other similar process in the nature of garnishment”; directed to a governmental entity to compel it to make a payment, from moneys otherwise payable to an individual, to another party in order to satisfy the individual’s legal obligation to provide child support or alimony; and issued by (1) a court of competent jurisdiction (domestic or foreign), (2) an authorized official pursuant to a court order or pursuant to state or local law, or (3) a state agency that is authorized to issue income withholding notices pursuant to state or local law or pursuant to section 466(b) of the Social Security Act. See 42 U.S.C. § 659(i)(5); 5 C.F.R. § 581.102(f); POMS GN 02410.200(B).

The agency may not honor IWOs issued by AmeriKids. Since they are not issued by a court, an authorized official pursuant to court order or state or local law, or an authorized state agency, IWOs issued by AmeriKids do not constitute legal process. 2 See POMS GN 02410.210(A)(4) (third-party garnishment orders, standing alone, are not sufficient to authorize garnishment). Section 207(a) of the Act prohibits the withholding of benefits based on orders that are not legal process. “The right of any person to any future payment under [Title II] shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process,” unless some other provision of law expressly provides for such collection. 42 U.S.C. § 407(a).

We caution that while IWOs issued by AmeriKids are not legal process, the agency must nonetheless determine, for purposes of benefit withholding, the validity of a court order purportedly underlying and served with an AmeriKids issued IWO.3 See POMS GN 02410.210(A)(4) (with third-party garnishment orders, agency considers whether underlying court orders, if any, authorize garnishment). Accordingly, we now consider whether the underlying court orders permit garnishment.

The Orders Underlying the IWOs Issued by AmeriKids Are Not Legal Process, and Thus Do Not Permit Garnishment

As noted above, the agency must comply with legal process directed to a governmental entity to compel it to make a payment, from moneys otherwise payable to an individual, to another party in order to satisfy the individual’s legal obligation to provide child support or alimony. See 42 U.S.C. § 659(i)(5); 5 C.F.R. § 581.102(f); POMS GN 02410.200(B). The 1978 South Dakota Judgment and Decree of Divorce that AmeriKids served with the IWO that it issued for Ronald P~ is not in the nature of garnishment, i.e., it contains no specific provision for income withholding by a third-party payor. Therefore, the decree does not constitute legal process. For the same reason, the South Dakota and Iowa judgment orders to enforce Ronald P~’s support obligation do not constitute legal process.

Although the 1988 Iowa Dissolution Decree that AmeriKids served with the IWO for Ronald H~ has an income withholding provision, it too fails to constitute legal process. While legal process need not expressly name SSA as a garnishee, the decree is directed to Ronald H~ “employer,” and not to a governmental entity to compel it to make a payment, from moneys otherwise payable to an individual, to another party in order to satisfy the individual’s legal obligation to provide child support or alimony.4 See 5 C.F.R. § 581.202(a).

Moreover, even assuming, arguendo, the 1988 Dissolution Decree constituted legal process, the decree must be facially valid, i.e., it must conform, on its face, to the laws of the issuing jurisdiction, and service of the decree on the agency must be proper. See 5 C.F.R. §§ 581.202, 581.305(a)(1); POMS GN 02410.205, 02410.210(A)(3)(b). Here, the decree appears to be valid on its face.5 However, we question AmeriKids’ service of the decree on the agency.

Service of legal process that is regular on its face must be in accordance with the law of the issuing state. See 42 U.S.C. § 659(c)(2); 5 C.F.R. § 581.202; POMS GN 02410.205, 02410.210(A). Under Iowa law, only the district court may serve an order of income withholding, standing alone, on the obligor’s payor of income. See Iowa Code Ann. § 252D.17 (“the district court shall provide notice by sending a copy of the order for income withholding or a notice of the order . . . to the obligor and the obligor’s payor of income by regular mail, with proof of service completed according to rule of civil procedure 1.442”). Here, AmeriKids served the decree on the Sioux Falls, South Dakota Field Office. Therefore, service on the agency was not proper under Iowa law, and thus, even if the decree constituted legal process, the agency may not honor it.

Conclusion

IWOs issued by AmeriKids do not constitute legal process, so the agency may not honor them. However, the agency must determine whether it may withhold benefits pursuant to an underlying court order served with an IWO issued by AmerKids. Here, the agency may not withhold benefits pursuant to any of the underlying court orders, standing alone, because none constitute legal process. Legal process need not expressly name the agency as garnishee or specifically require payment from the obligor’s Social Security benefits. However, legal process must be directed to and for the purpose of compelling a governmental entity that holds moneys, otherwise payable to an individual, to make payments from such moneys in order to satisfy the individual’s legal obligation to provide support. Here, we conclude that none of the underlying court orders satisfy this requirement.
John Jay Lee
Regional Chief Counsel

By: ___________________________
Yvette G. Keesee
Assistant Regional Counsel


Footnotes:

[1]

AmeriKids also served an IWO issued by the Iowa Department of Human Services in August 2008 (and presumably served on the Waterloo, Iowa Field Office) with this IWO. According to the Sioux Falls Field Office, the agency has been withholding $56.33 from Ronald H~’s monthly Social Security benefits since 2008, based on the Iowa IWO. Since neither you nor the Sioux Falls Field Office expressed any concerns regarding the validity of the state issued IWO, we considered it as background information and did not attempt to assess its validity for withholding purposes.

[2]

In South Dakota, the Department of Social Services, Office of Child Support Enforcement (OCSE), “is the agency designated to issue income withholding orders in the state . . . .” S.D. Admin. R. 67:18:01:02.

[3]

Because IWOs issued by AmeriKids are not legal process, we did not need to reach the issue of whether the agency may withhold the amounts specified in the two IWOs you submitted for our review. Nonetheless, “[t]he system limits the garnishment amount to the lesser of the State maximum or the maximum under the Consumer Credit protection Act (CCPA (15 U.S.C. 1673(b)) and is based on the law of the State where the beneficiary resides.” POMS GN 2410.215(A)(3). Under Iowa law, “[t]he amount withheld for support, including the processing fee shall not exceed the amounts specified in the [CCPA].” Iowa Code Ann. § 252D.17(3). If an obligor is supporting another spouse and/or child, the CCPA limits withholding to 50%; if not, the limit is 60%, except the limits are 55% and 65%, respectively, if the obligor is more than 12 weeks in arrears. See 15 U.S.C. § 673(b)(2)(B); POMS GN 02410.215(3).

[4]

Our opinion may have differed if the issuing court, rather than AmeriKids, had served the decree on the agency or if Ronald H~ was receiving Social Security Title II benefits in 1988 when the court issued the decree. POMS GN 02410.205(B)(2) directs the agency to accept garnishment orders that do not expressly name SSA as garnishee, employer, income payor etc., provided the order does not “specifically name[] someone other than SSA (e.g., General Electric).” However, the agency’s application of this POMS must be consistent with the requirements for legal process, which require, as stated above, that the garnishment order be “directed to, and the purpose of which is to compel, a government entity” to garnish monies payable to the individual. 5 C.F.R. § 581.102(f).

[5]

The decree recites the names of the parties, the basis for the action being taken, and the amounts to be withheld. The judge and the clerk of the court also signed the decree. (Perhaps a more legible copy of the decree reflects the seal of the court.) See Millard v. U.S., 16 Cl. Ct. 485, 489 (Cl. Ct. 1989) (concluding the order was regular on its face where it recited names of the parties, basis for the action being taken, and amounts to be withheld; and bore seal of the issuing court, stamped signature of judge, and attestation by clerk of the court), judgment affirmed, 916 F.2d 1 (Fed. Cir. 1990).


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PR 04505.018 - Iowa - 05/16/2012
Batch run: 05/16/2012
Rev:05/16/2012